Significant GST reforms are currently underway, specifically designed to make ‘aspirational goods’ — those items people dream of owning — more accessible and affordable for a broader population. This was a key point emphasized by K. Balasubramanian, Joint Secretary for the Department of Revenue within India’s Ministry of Finance.
Speaking at a workshop titled ‘GST 2.0 – Unfolding the Next Era of GST: Simplification, Technology & EODB,’ hosted by the Bangalore Chamber of Industry and Commerce (BCIC), Balasubramanian detailed the government’s comprehensive approach. These reforms, which took effect from September 22, are built upon three core pillars: fundamental structural adjustments, strategic rate rationalization, and enhanced process improvements.
He elaborated that the structural reforms are tackling long-standing issues, such as inverted duty regimes found in sectors like fertilizers and textiles. Concurrently, the tax code is being simplified by merging the 12% tax bracket into a lower 5% ‘merit rate’ and reducing the 28% bracket (for non-cess items) to 18%. This strategic rationalization is precisely what aims to bring aspirational goods within easier reach of consumers.
Adding to this, D.P. Nagendra Kumar, a former Member of GST at the Central Board of Indirect Taxes and Customs (CBIC), underscored an important distinction. He highlighted that the substantial increase in monthly GST collections, now reaching approximately ₹1.85 lakh crore, is a direct result of the “economic efficiency of tax collection” and not due to any hikes in tax rates.